Bondi strikes a deal with Legislature over $300M foreclosure settlement

Florida Attorney General Pam Bondi announced Friday that her office has reached a deal with the Florida Legislature over how to use $300 million in foreclosure settlement money that has sat dormant since March amidst negotiations over spending authority.

One-fifth of the money, about $60 million, could be approved in the coming weeks for programs like down-payment assistance, legal counseling for foreclosures and initiatives to help deal with the backlog of foreclosures in state court.

The state Legislature will decide how to spend $200 million of the total during the next legislative session, meaning it will be spent after May. According to the agreement, that money will go to “housing-related” initiatives, a broad term that could include "foreclosure prevention, neighborhood revitalization, affordable housing, homebuyer or renter assistance, legal assistance, counseling and other housing-related programs."

The deal also allows an additional $40 million to go to state coffers as a “civil penalty”, adding to the $33 million that has already been sent to the state treasury.

The deal was announced by Bondi, Speaker-designate Will Weatherford and incoming Senate President Don Gaetz.

Bondi originally argued that she had the authority to spend the foreclosure-settlement cash, while legislative leaders pointed out that they are legally authorized to appropriate funds.

Meanwhile, Florida recently became the state with the highest foreclosure rate in the country. The $300 million cash payment came in addition to more than $8 billion in mortgage assistance that Floridians were set to receive directly from banks as part of the national $25 billion settlement.

Though Bondi has repeatedly stated that she wanted the money to go directly to housing-related issues, it was not clear if the Legislature would sign on to that. If the Legislature sticks to this agreement, most of the money from Florida's settlement will go to help the state's weary housing market.

"This plan gets much-needed assistance to the homeowners and communities suffering the effects of the foreclosure crisis, and ensures that the settlement funds are spent with the transparency, accountability and flexibility that comes from the legislative process,” Bondi said in a statement. “I thank President-designate Gaetz and Speaker-designate Weatherford for working together with me to implement the mortgage settlement in a way that’s in the best interests of our state.”

Added Gaetz: “I am grateful to Attorney General Bondi and Speaker-designate Weatherford for working with us on a proposal which ensures that these funds are appropriated by the legislature in a transparent and accountable manner,” said Gaetz, R-Niceville. “Together with the approximately $7.5 billion in relief that will go directly to homeowners, this funding will play an important role in the multitude of state and federal efforts to provide relief for homeowners facing foreclosure.”

See the full press release below:

TALLAHASSEE, Fla.—Attorney General Pam Bondi, President-designate Don Gaetz and Speaker-designate Will Weatherford today jointly announced their support for a plan for allocating the remaining $300 million that the Attorney General recovered for Floridians in the national mortgage settlement. The plan ensures that the entirety of these funds will be spent consistent with the terms of the settlement agreement, but also that the funds will be allocated through the legislative process. These settlement funds are in addition to the approximately $7.5 billion in expected relief that the national mortgage settlement provides directly to Florida homeowners.

At the next meeting of the Legislative Budget Commission, with the support of Gaetz and Weatherford, Bondi will seek approval for budget amendments to disburse $60 million of the settlement funds. Bondi anticipates proposing that the $60 million be used to fund down payment assistance for Floridians, foreclosure-related legal assistance and counseling, state court initiatives to ease the foreclosure backlog and Attorney General’s office enforcement efforts.

The balance of the funds will be allocated through the appropriations process in the upcoming legislative session. Gaetz and Weatherford have agreed to support the appropriation of approximately $200 million for housing-related purposes, consistent with the terms of the settlement agreement. Although the specific appropriations must be determined through the legislative process, possible uses of these funds include foreclosure prevention, neighborhood revitalization, affordable housing, homebuyer or renter assistance, legal assistance, counseling and other housing-related programs. Finally, consistent with the discretion afforded her under the settlement agreement, Bondi will designate approximately $40 million of the settlement funds as additional civil penalties.

“This plan gets much-needed assistance to the homeowners and communities suffering the effects of the foreclosure crisis, and ensures that the settlement funds are spent with the transparency, accountability and flexibility that comes from the legislative process,” said Bondi. “I thank President-designate Gaetz and Speaker-designate Weatherford for working together with me to implement the mortgage settlement in a way that’s in the best interests of our state.”

“I am grateful to Attorney General Bondi and Speaker-designate Weatherford for working with us on a proposal which ensures that these funds are appropriated by the legislature in a transparent and accountable manner,” said Senate President-designate Don Gaetz (R-Niceville). “Together with the approximately $7.5 billion in relief that will go directly to homeowners, this funding will play an important role in the multitude of state and federal efforts to provide relief for homeowners facing foreclosure.”

“I appreciate the hard work of Attorney General Pam Bondi and Senate President-designate Don Gaetz both in securing the settlement for distressed homeowners and for representing the interests of the state,” said Speaker-designate Will Weatherford (R-Wesley Chapel). The framework that has been outlined today will enable the Legislature to fulfill its important duty as appropriators while also directing these funds to those who have been negatively impacted. I look forward to working together in the upcoming legislative session.”

Attorney General Bondi formally entered a landmark $25 billion joint federal-state agreement with the nation's five largest mortgage servicers over foreclosure abuses and unacceptable nationwide mortgage servicing practices. In addition to the funds described above, the agreement provides direct relief to homeowners and mandates extensive reforms of the banks' mortgage servicing practices. For more information regarding the settlement, please click here: http://myfloridalegal.com/pages.nsf/Main/C13C72583D0EF5BB8525799F00595D99

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